Airline shares soar despite Easyjet posting €1bn loss

EasyJet has posted a maiden annual loss of nearly €1bn and has effectively written off any recovery in business until the second quarter of next year at the earliest

Airline stocks continued to rally despite Easyjet reporting a maiden annual loss of nearly €1bn and effectively giving up on any recovery until at least the second quarter of next year.

Ryanair, Aer Lingus owner IAG, Lufthansa, and Air France-KLM all rose, as did Easyjet itself, despite posting a full-year loss of $845m (€927m) for the 12 months to the end of September.

Stock markets, in general, received a boost from continued talks of fresh US stimulus measures coming down the line.

Easyjet has given up hope of a winter comeback for European air travel, shifting the focus to liquidity and the prospects for next year, starting with Easter in early April.

The UK discount airline entered 2020 with one of the strongest balance sheets in the industry, and has said that it currently has about £2.3bn in cash to survive an extensive pandemic-driven slump. 

Still, the carrier said it will continue to evaluate ways to raise cash, and called on the UK government for further support.

With summer demand ruined by a resurgence in Covid-19 infections and the coming cold months essentially a write-off, Easyjet and its peers in Europe are looking for ways to hang on should the anticipated rebound be further delayed. 

The carrier, which accepted £600m of UK state-guaranteed loans earlier in the year, is reportedly in talks with the British government about other financings.

Additional reporting Bloomberg